The head of South Korea's financial regulator said Monday that financial health is one of key requirements in allowing five leading securities firms to start investment banking businesses.
Choi Jong-ku, chairman of the Financial Services Commission, made the comments during a parliamentary session after being asked about concerns that a massive amount of funds could flow into large investment banks that sell investment management accounts (IMAs).
Choi said measures are in place to ensure that a massive amount of funds could not flow into large investment banks, though he did not elaborate.
The financial regulator is set to decide this month whether to allow five leading securities firms to start investment banking businesses. The five major securities firms are Mirae Asset Daewoo Securities, NH Investment & Securities, Korea Investment & Securities, KB Securities and Samsung Securities.
South Korea has been pushing to foster homegrown, mega-sized IBs modeled after Goldman Sachs. It has decided to revise legislation within this year to allow them to expand their businesses beyond brokerage services.